Following are the ten schools of strategy :
The Design School :
This school seeks to find a match or fit for internal capabilities and external possibilities. It says to think before you leap.It lays a lot of importance on the analysis of external and internal situations. External covers the threats and opportunities and the internal covers the strenghths and weaknesses.Basically it is a SWOT analysis.Social responsibility and Managerial values also play a role in the formulation of the strategy.Once the alternatives are figured out,the best of them is chosen. once a strategy is chosen,it is then implemented. Premises of the Design School :
It should be a deliberate process of conscious thought
Responsibility regarding the control and consciousness should be attached to the CEO The model of strategy should be simple and informal
They should be one of a kind
The process is complete when the strategies seem to be formulated as perspective.They need to be explicit. Only when the best one is chosen,can we implement it.
The criticism against this thought scool are :
No clarity in the organization in terms of it's strenghths and weaknesses. When ,how and when not should be the strategies formulated The major assumption is that the data can be aggregated and transmitted to the upper levels without substantial losses Other major assumption is that environment can always be understood and is sufficiently stable in the future. Example : Design School
Microsoft’s share has been falling in the recent past.The reason can be attributed to lack of long term contracts with OEM manufacturers and good design team which can influence the customers to a large extent.In order to bridge this gap,Microsoft entered in to a strategic alliance with NOKIA there by acquiring the capability internally. The planning school :
The basic idea of this thought school is to do a SWOT analysis and articulate them in to actionable items/objectives and then elaboration there on. The main steps in the process are :
Objective setting stage
External Audit Stage
Internal Audit Stage
Ten Schools Of Strategy
Strategy Evolution Stage
strategy operationalisation stage
The premises of this school are as follows :
Strategies are a result of control,formal planning,breaking down in to steps with a checklist and support by techniques. Responsibility of the entire process vests with the leader(The CEO) Strategy needs to be made more explicit in terms of objectives,budgets,programs and operating plans. The major criticism is :
It assumes that the organizations can predict the future/environment remains fairly stable Effective strategy making connects action to thought process which in turn connects implementation to formulation which is missing. Formal systems could never internalize, comprehend and synthesize information. Example : Planning School
In the last quarter, results of INFOSYS were slightly on the lower side of the market.Now,in the process of improving these numbers it needs to analyse the following : Internal factors : Attrition rate , Number of new clients added External Factors : How European markets are performing,General GDP outlook,etc. The Positioning School :
While the Design Thought school and the Planning thought school didn't put constraints on strategies possible in given situation,the positioning thought school argues that only a few key strategies - as positions in the economic market place are desirable in the given industry ,which can be defended against existing and future competitors.This thought school desins generic categories of strategies. Following are the premises of Positioning School :
Strategies are generic,especially common,identifiable positions in the market. The economic environment is competitive.
Strategy formation is selection of one such generic positions. Analysts play a major role in assisting managers through their...